Gold rallied to fresh record highs on Monday past $3400 for the first time in its history, as the dollar weakened and concerns about the economic impact of the US-China trade war grew, sending investors towards safe havens.

Spot gold prices rose 2.6% to $2415 an ounce as of 10:46 GMT, ith a record high at $3424.

Dollar’s Weakness Underpins Gold

The US dollar weakened sharply after fresh criticism by Trump towards Fed Chair Jerome Powell, hurting investors confidence, and in turn underpinning gold prices.

As tariff jitters and doubts about the stability of the US financial status grow, the haven demand on gold is likely to surge as well.

Gold surges over $700 in 2025

Gold is up over $700 so far this year, managing to pass $3300 on Wednesday and then adding $100 in a few days.

Several analysts expect the gold’s rally to peter out pretty soon with a likely peak rapidly approaching.

Minerals Market: Gold Leads

Silver rose 0.2% to $32.66 an ounce.

Platinum rose 1% to $957.15. 

Palladium fell 3% to $934.34.

Powell Rattles the Markets

Fed Chair Jerome Powell warned last week that US tariffs could slow down growth and lead to higher prices for consumers, after chaos engulfed the financial markets.

Gold has thus become the final haven for many investors and the most bought asset in the world in a very short amount of time.

Historic Similarity 

Analysts compared gold’s rally this year to the rally that happened during the Iranian Revolution in the late seventies, when prices surged by 120% between November 1979 and January 1980.

Gold passed $3000 for the first time ever last month amid concerns about the global trade war and as a  haven against inflation.

Trump’s Tariffs 

The Trump administration imposed upwards of 245% tariffs on Chinese imports, while imposing 10% base tariffs on all other countries around the world.

Trump said the aim is to bring manufacturing back to America and collect billions of dollars from tariffs, reducing the pressure on income taxes.

Factors Behind Gold’s Rise:

1- A weaker Dollar

The dollar index hit three-year loss amid rising risks with investors fleeing US assets while the Fed heads towards monetary easing measures.

A stronger euro also impacted the dollar, which in turn boosted gold prices.

2- Geopolitical risks, due to Trump’s aggressive tariff policies and unpredictable moves.

3- Stagflation Concerns 

Investors are increasing concerns about a devastating combination between stagnation and inflation in upcoming months.

4- Lower Interest Rates

As global central banks cut interest rates worldwide, gold’s attractiveness is boosted compared to yielding assets.

5- Increasing purchases by global central banks.

6- A rebound in Exchange-Traded Funds based on gold, chief of which is the SPDR Gold Trust, the world’s  biggest.

Risks 

Gold is still burdened by the US 10-year treasury yield, which is standing at 2.15%, the highest since September 2023.

Despite the Fed starting the cycle of rate cuts, real yields continued to be stubborn, which weighs on gold prices.

Bitcoin rallied on Monday on track for the third straight profit, hitting a three-week high and approaching the $90,000 barrier once more.

It comes as the dollar tumbled against main rivals with investors losing confidence in US assets due to concerns about the independence of the Federal Reserve.

The Price

Bitcoin rose 3% at Bitstamp today to $87,765, the highest since April 2, with a session-low at $85,134.

Bitcoin rose 0.2% on Sunday, marking the second profit in a row.

The cryptocurrency added 1.8% last week, the second weekly profit in a row as global corporations continued to expand their bitcoin holdings.

Crypto Market Value

The market value of cryptocurrencies rose by over $75 billion today to a total of $2.850 trillion.

The Dollar

The dollar index fell 1.5% today to three-year lows at 97.92 against a basket of major rivals.

It comes as investors' confidence deteriorates once more in the US economy due to perceived US government interference in the Federal Reserve.

The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.

Such news continues to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.

Gold prices rose in European trade on Monday and resumed the gains after a short hiatus in the last session, hitting fresh record highs and about to trade above $3400 an ounce for the first time ever.

It comes as the dollar swoons against major rivals, as investors lose confidence in the greenback due to heavy attacks by US President Donald Trump against Fed Chair Jerome Powell.

Prices

Gold prices rose 1.9% today to $3390 an ounce, a record high, with a session-low at $3227.

On Thursday, the precious metal lost 0.45%, the first loss in three days on profit-taking, with trading closed on Friday for the Good Friday holiday.

Gold rose 2.8% last week, the second weekly profit in a row on strong haven demand as the US-China trade war escalates.

US Dollar

The dollar index fell 1.1% today to three-year lows at 98.25 against a basket of major rivals.

It comes as investors' confidence deteriorates once more in the US economy due to perceived US government interference in the Federal Reserve.

The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.

Such news continues to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.

US Rates

Fed Chair Jerome Powell warned that ongoing tariffs and trade wars between the US and other countries could undermine the Fed’s ability to contain inflation and support growth.

Chicago Fed President Austin Goolsbey said he hopes the US won’t turn into an environment where the Fed’s ability to set monetary policies independently from political pressure is undermined.

According to the Fedwatch tool, the odds of a May Fed 0.25% rate cut stood at 12%.

The odds of such a cut in June stood at 70%.

SPDR

Gold holdings at the SPDR Gold Trust remained unchanged on Thursday at 952.29 tons.

The euro rose in European trade on Monday against a basket of major rivals, expanding the gains against the dollar for the second straight session and hitting a four-year peak as it trades above the psychological barrier of $1.15 for the first time since late 2021.

It comes amid a growing loss of confidence in the dollar due to US President Donald Trump’s plans to restructure the Federal Reserve, which could impact its independence. 

The Price

The EUR/USD price rose 1.25% today to $1.1533, the highest since November 2021, with a session-low at $1.1391.

The euro rose 0.25% on Friday against the greenback, the second profit in three days on thin holiday trading.

The pair rose 0.3% last week, the fourth weekly profit in a row on hopes for reaching a US-EU trade deal soon.

US Dollar

The dollar index fell 1.1% today to three-year lows at 98.25 against a basket of major rivals.

It comes as investors confidence deteriorates once more in the US economy due to perceived US government interference in the Federal Reserve.

The White House said it’s considering ways to fire Fed Chair Jerome Powell after Trump expressed urgent desires to terminate him due to disagreements about monetary policies.

Such news continues to rattle the markets, which depend heavily on the independence of the Federal Reserve from any political interference as a pivotal mainstay in the global financial system.

The ECB 

The European Central Bank cut interest rates by 25 basis points to 2.25% as expected by most analysts today.

It’s the seventh consecutive rate cut as the ECB attempts to boost the struggling eurozone economy amid a trade war with the US.

ECB President Christine Lagarde said that tariffs represent a shock, but their impact on inflation remains unclear.

She said the picture might not become clear by the next policy meeting in June, as the 90-day pause on tariffs would still be in place by then.

European Rates

Reports showed that some ECB officials see a high probability of a rate cut in June.

Markets are pricing in a 60% chance of an ECB rate cut in June.